Sponsored by Haydock Finance
John Jenkins, Haydock Finance CEO, reflects on lessons learned and the year ahead as he asks
The new normal, what can the transformation teach us?
As I look back to the second quarter of 2020 it seems the question asked most often was ‘When do you think we will get back to normal?’. When can we return to the office, when will the shops re-open, when will the pubs re-open, what’s going to happen with schools, exams, holidays etc. It was a pretty long list and all driven by a sense that this was a temporary crisis soon to pass and we would all return to the way things were before the lockdown in March. As Spring moved into Summer and that brief period of almost normality gave way to further uncertainty and then lockdown 3, the question turns to more of a ‘What do we think the new normal will be?’ It seems clear that some things have changed so fundamentally that a return to February 2020 now seems not only unlikely, but, actually not a preference – at least not in every way.
The future of aviation is strictly tied to several factors
Don’t waste a good crisis
There is a saying “Don’t waste a good crisis” and I think, as we have all adjusted to a different environment it has become clear that some positives have emerged, some things changed possibly forever, some expected evolutions altered course. The challenge now is to learn quickly and adapt to this to get the most benefit.
The key one for me is the work environment. I learned, my senior team learned, my entire team learned that it was OK to work at home. That you could be effective working form a distance. That technology, especially video calling was a good way to keep in touch and communicate. That your teams were entirely capable of operating remotely and could manage their own time. That you could recruit and train remotely. I think we also learned though what you missed by not being able to meet in person and have a genuine group discussion rather than each take turns to speak; by not being able to stop at the desk or call across to your colleagues. We learned how difficult it was to train people when they couldn’t just watch and learn from colleagues. We learned how difficult it was to maintain a sense of culture and engagement without that familiarity of the office and team. So I think the new normal is a hybrid environment – a mix of remote and office with a more thoughtful approach to how we use the office to maximise contact time, learning, discussion and an acknowledgement that ‘sole working’ can be efficient form home with more flexibility and freedom. At Haydock we are going to adopt a role based flexible approach from June with an expectation that everyone is in the office at least some of the time.
Survival of the fittest
Looking more broadly, we have seen unprecedented levels of government intervention – whether to protect jobs, allow viable businesses to trade through the trough or help people make ends meet. This will come to an end and lead to a period of transition and adjustment that, in the short term will likely see an upturn in unemployment and an increase in business failure. The difference potentially between this and other economic downturns is that this is an artificial one. In that context and for most markets demand will remain if not increase, so we are likely to see winners as well as losers and these will need support at the very time uncertainty is challenging ongoing lending appetites. Fortune will favour the adaptable and agile when it comes to decision making.
Some markets have seen deeper and perhaps longer-term impacts. Whilst pubs and casual dining may receive a boost from suppressed demand, this will not replace the revenue lost in the past 12 months. The same is true of travel and tourism. Online retail has accelerated to the long-term detriment of high street retail – accelerating a trend and bringing perhaps a systemic change to this industry. Many businesses in all sectors are looking at higher debt levels or weaker cash positions as we move through into the recovery phase providing a further challenge in their ability to grasp opportunities that may arise. Again, well founded financial support may be required.
Relationships are key to growth
Another observation for me, and the same was true during the financial crisis, is the reminder of how important relationships are. Perhaps we were all becoming a little transactional in our approach and this has reminded us that trust, consistency, reliability and flexibility built on solid relationships is so important – more important than a bit faster or a bit cheaper. Maybe that means we shop local at an individual level. Maybe at a business level we focus more on strengthening existing relationships rather than just building more.
Challenges and Opportunities
And lastly the B word. We knew that following Brexit the world was going to change and so March 21 was never going to be the same as March 20. The Pandemic and resulting disruption have allowed us in part to overlook this, but we can no longer. There will undoubtedly be increased short term friction and also some unintended consequences. But also some opportunities to bring manufacturing closer to home, to seek out new export markets, to innovate and develop in a different framework, to create focus around newer sectors such as renewables and traditional ones such as agriculture.
As a financier our challenge is always to adapt to the environment around us and look for opportunities in the new normal to support industry and the economy. This new normal feels like it has some challenge, but also plenty of opportunity.